Is a 500 Gallon Propane Tank Right For Your Home?

An image of a 500 pound propane tank.

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Propane is increasingly becoming a popular energy source for US households. Statistics indicate that over 50 million American homes rely on propane as the primary or secondary source of cooking, housewarming, and water-heating energy. 

And with the recent clamor for clean energy to curb global warming, there’s no doubt these figures will go up.

The ideal tank size is one of the most crucial considerations when switching to propane. You don’t want your tank running out of gas in the middle of one of those freezing winter nights

Would you like to save money on your propane costs? If so, you’re in the right place! Click here to get 100% free, no obligation quotes from propane dealers in your area.

Or worse still, you wouldn’t want to stop cooking mid-way because you ran out of propane.

So, what’s the ideal propane tank size? Is a 500-gallon propane tank right for your home? Which factors should you consider before buying a 500-gallon propane tank? In this article, our experts give detailed answers to these and other related questions.

Discover if a 500-gallon propane tank is the ideal choice for your home’s energy needs. Make an informed decision today.

Is A 500-Gallon Propane Tank Big For A Household?

The short answer is — No; a 500-gallon propane tank is not too big for a household. On the contrary, it’s the right size for homes between 2500 to 4500 square feet relying on propane for heating, cooking, and dry cleaning. Make sure you follow this link for a full guide on propane tank sizes.

However, you might need a bigger tank, depending on the following factors:

Appliances In Your Home

The more appliances you have in your house, the higher your propane consumption will be. Different devices have varying energy consumption:

Suppose you have a huge home with several furnaces, fireplaces, and water heaters. A 500-gallon propane tank might not be enough unless you’re comfortable making several refills annually.

Your Lifestyle

Another factor affecting a 500-gallon propane tank’s suitability for your home is your living habits. If you work from home or host several frequent guests, your energy needs will be slightly higher than average, leading to more propane consumption. 
Comparatively, if you’re using the house as a holiday home you rarely visit, a 500-gallon propane tank might be more than adequate.


Your neighborhood’s prevailing weather conditions will also significantly determine the ideal propane tank size. If the weather is predominantly cold, you’ll require more propane to heat your home throughout the year, making it essential to have a sizable tank. 

Similarly, if your neighborhood has longer winters with extremely cold temperatures, you’ll have a higher propane consumption.

Your Home’s Condition

A well-maintained and properly insulated home can lower your propane consumption, making a 500-gallon tank enough. Here’s how:

  • Insulation: Poor ventilation can cause heat loss, prompting your furnace to run longer, frequent cycles. As a result, your propane tanks will run out quickly.
  • Drafts: Drafts are massive power wasters that can increase propane consumption, forcing you to acquire bigger tanks. You can reduce air leaks by weather-stripping and caulking your windows and doors.
  • Furnace filters: A clogged filter blocks airflow, making your furnace work harder to cool your home. On the other hand, regularly cleaning your furnace, heat recovery ventilators, and room air conditioners can improve the airflow in your home, enabling the furnace to run shorter, less frequent cycles — and reducing your propane consumption.

Factors To Consider For A 500-Gallon Propane Tank

Will a 500-gallon propane tank be ideal for your home? If you think so, below are a few factors to consider before installing one:


When deciding the best place to put your propane tank, you should ask two primary questions — how safe will the tank be in the rare case of a leak, and how close is it to the driveway to allow safe refilling?

The rule of thumb is that above-ground 500-gallon propane tanks should be at least 10 feet from your house, exterior appliances, and neighboring properties. The same applies to underground propane tanks holding up to 2,000 gallons. 

For above-ground propane tanks holding between 1,000 to 2,000 gallons,  the safe distance increases to at least 25 feet from your house or neighboring homes and buildings.

These safe distance requirements reduce the probability of explosions during leaks because of the problems with tank pressure. They ensure that if a tank leaks, the leaking propane isn’t close to flames that might spark fire accidents.

As you look for an ideal location, consider the tank’s accessibility from the driveway. Most states require propane tanks receiving refill deliveries to be at least five feet from the driveway. This way, if there’s an explosion, you can easily escape.

Inspections and Permits

Different states have varying laws governing propane tanks’ inspections and permits. Some require all property owners to work with a designated City Gas Inspector when installing new tanks or replacing old ones with higher-capacity alternatives. 

The inspector must approve your propane tank and piping system after installation before use.

According to the US Department of Transportation, propane tanks should be requalified every ten years from the original manufacturing date. During the requalification, inspectors will perform proof pressure and volumetric expansion testing. 

Therefore, before buying a 500-gallon propane tank, confirm its manufacturing date. Also, during installation, consider the site’s accessibility for testing.

Installation Prep

Both above-ground and underground propane tanks require considerable preparation before installation. Generally, underground tanks have more detailed preparation processes and take longer to install. 

Below is a run-down of standard preparation procedures for both alternatives:

Above-Ground Propane Tank Preparation

Usually, installing above-ground propane tanks takes a day at most. That’s because such tanks have less detailed installation preparation procedures. 

All you have to do is find an ideal location, clear the site, create a stable flat concrete platform, lay the tank, and connect pipes to your home’s appliances.

Underground Propane Tank Preparation

Normally, Installing underground tanks takes a couple of days, depending on the tank’s size. It typically involves the following steps:

  • Identifying an ideal location meeting the distance requirements mentioned above
  • Getting requisite licenses from your states energy and environmental agencies
  • Excavating a trench for the propane tank
  • Digging tunnels for the pipes connecting the tank to your home
  • Laying the tank and pipes
  • Returning the soil to the trenches to cover the tank and pipes
  • Testing the system to ensure it’s safe and functions properly

How Much Is A 500-Gallon Propane Tank?

The cost of propane tank purchase and installation varies from company to company. While the average cost of installing propane gas tanks for home use ranges between $700 to $4,500, research shows 1,500 to 3,000 can get you a 500-gallon tank. 

However, to be safe, we recommend budgeting  $1,650 to $1,850, depending on your state and installation company.

Above-Ground Propane Tank Cost

Generally, installing above-ground propane tanks is cheaper and takes less time. And reasonably so —  they’re easier to install, leading to lower labor costs and less preparation expenses. 

According to a recent Forbes publication, homeowners require between $1,400 to $1,700 to install a 500-gallon above-ground propane tank.

Underground Propane Tank Cost

As mentioned above, installing underground propane tanks requires more planning and resources, leading to higher installation costs. 

For example, you’ll need more excavation equipment to dig trenches, more laborers to lay the tank and pipes underground, and, in some states, at least one Inspector to ensure you follow the right procedures. 

According to the Forbes publication above, installing a 500-gallon propane tank underground requires between $1,500 and $3,000.

How Long Will A 500-Gallon Propane Tank Last?

Generally, the average American household will use a 500-gallon propane tank for two to eight months. The exact duration depends on your property’s size and the number of regular occupants. 

It might also vary based on your home’s energy efficiency and the neighborhood’s prevailing conditions. 

We already outlined these factors in the previous sections of this guide. However, just to jog your memory, here’s a summary of the factors that might reduce the time your 500-gallon propane tank lasts:

  • Extremely cold weather conditions 
  • Too many propane-reliant appliances in your home
  • A poorly ventilated house with massive heat losses
  • Regular guests or a work-from-home schedule that keeps most of your appliances plugged in throughout the day

How Much Does It Cost To Fill A 500-Gallon Propane Tank?

Propane prices vary from location to location. To refill a 500-gallon propane tank, you should budget between $600 to $1,600. This amount will afford you about 400 gallons of propane.

Why 400 and not 500? Well, most propane tanks can only be filled to 80% of their capacity to give room for expansion during extremely high temperatures. 

This law primarily applies to above-ground propane tanks staying exposed to fluctuating temperatures throughout the day. 

When refilling an underground tank, you can add a little more.

Find The Best Propane Dealers

Are you wondering where to get affordable and reliable propane dealers in your locality? Worry no more — Compare Propane has your back. We’ve connected several consumers like you to trustworthy propane dealers since 2014. Get In Touch with us to learn how to lower your propane costs. Adios, and see you in our next guide.

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Ryan McCabe

Ryan McCabe

Ryan is a home and small business energy expert, having overseen retail propane, heating oil, and HVAC services companies. On ComparePropane, Ryan writes about things that people should know when shopping for or using propane in their homes and businesses. 

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